Numerous examples and applications of monetary equivalent data exist in today's society. For example, the fare payment system used by the Bay Area Rapid Transit (hereafter referred to as "BART") system in San Francisco is an example of an application in which monetary equivalent data is read and written electronically. In this system, the user can obtain a transit ticket and deposit any desired amount of money into it from an automatic vending machine. The information is stored in the ticket magnetically in the form of encoded data written on a magnetic stripe. Each time the user travels from one place to another, the system deducts the fare from the amount represented by the magnetically encoded data, thus, reducing the value of the ticket. When the value of the ticket is nearly exhausted, it can be restored to a high value by inserting it again into an automatic vending machine and depositing additional funds. The BART system eliminates the need for handling money and making change at the point of entry to the transit system, thereby reducing labor costs and increasing efficiency.
A similar advantage can be realized in many other circumstances where an electronically readable and alterable "token" can eliminate the costs and delays associated with money handling at the point of use. Such a token might therefore be used as a meal ticket on a college campus, as a ride ticket at an amusement park, or wherever tickets or tokens are now used to speed monetary payments and/or eliminate unnecessary labor.
The system described above, however, suffers from at least three significant disadvantages. First, paper tickets with magnetic stripes deposited on them are subject to wrinkling or tearing which can cause loss of the monetary equivalent data. Also, the magnetic stripes are subject to erasure by environmental magnetic fields, even if the paper carrier and magnetic material are physically intact. Second, since magnetic recording is a read/write technology, it is possible for a technologically sophisticated person to read the contents of the magnetic stripe when the ticket has a large monetary value, use the ticket until the value is nearly gone, then rewrite the original data into the ticket to restore its original value. It is not necessary for the person to understand the encoding of the monetary data in order to do this. Therefore, the use of a read/write technology makes the tickets vulnerable to counterfeiting. Third, the magnetic recording technology requires uniform motion of the magnetic material across the read/write heads in order to read and write data reliably. This makes it necessary to use a relatively complex mechanical ticket-handling mechanism to read, debit, and rewrite the monetary equivalent data.